Thanks for starting this thread - Nigel (Bongagong), as well as the Ticketmaster thread: Subject 23834
Started getting in last week, and began getting into options (Dec 30s and 35s) earlier this week, buying even up to this (Friday) morning.
Fwiw, here's some USAI stuff that may be of interest, including some analyst research comments. (Fwiw, ANY fundamental analysis will most likely fall somewhat short of capturing the "enthusiasm" factor associated with internet stock prices <g>.) Word around NBMO is that Ticketmaster sees 50+ on opening day (even though an Internet IPO hasn't really "made it" until it sees at LEAST $100) They are purportedly pricing TMCS low (~$10) in part because Diller will be buying a CHUNK of IPO priced stock. ...My own WAG for USAI is $50+ within weeks of the TMCS IPO...
Here are several TMCS links for reference:
Ticketmaster homepage:
ticketmaster.com
IPO Central on TMCS:
ipocentral.com
IPO-Alert on TMCS:
ostman.com
IPO Data on TMCS:
ipodata.com
Edgar SEC TMCS filings:
edgar-online.com
Red Herring on TCMS:
redherring.com
"Will Ticketmaster Online-CitySearch Be Next Internet Gem? - Report"
newsalert.com
"IPO VIEW - Internet IPOs rush back to market"
newsalert.com
The following is part of NationBank Montgomery's Oct. 30 post-earnings research report on USAI - they are now in quiet period. Anyone wanting a complete pdf copy (which includes some balance sheet and financial breakout of Ticketmaster - which I will try to post here later unless someone else volunteers to) should email me with USAI in the subject heading. I will email a single BCC copy to all requesters sometime this weekend:
=========
Results Driven by Strong Performance at USA Network/Sci-Fi and Studios USA
USA Network/Sci-Fi Channel 3Q98 EBITDA was up an impressive 31% yr./yr. to $59 million vs. $45 million a year ago, beating our estimate of $46 million, as a result of higher advertising and affiliate revenue. USA Network continues its ratings growth, with a 2.2 rating in 3Q vs. 2.1 a year ago, growth of 5%. USA Network is the highest rated cable network in primetime for the first nine months of 1998. We expect 4Q98 EBITDA of $74 million, flat over 3Q98 as investment for a new night of original programming continues. We have raised our 1998 EBITDA estimate to $275 million from $262 million, 35% growth yr./yr., to account for strong 3Q98 results.
The Sci-Fi Channel continues to add households, increasing 11% yr./yr. to 51 million. Management intends on investing in original programming in order to build upon Sci-Fi's unique identity and pick up additional cable affiliates. Sci-Fi programming continues to perform well, with Welcome to Paradox up 57%, and Star Trek up 100% over their comparable time slots in 1997. Studios USA 3Q98 EBITDA was $12 million vs. $8 million a year ago, strong 50% growth and easily beating our estimate of $7 million. Studios USA produces Jerry Springer, Sally Jessy Raphael and Maury Povich, three of the top-rated talk shows, plus Law & Order, in its ninth season. The Studios USA-produced Brother's Keeper was picked up for the rest of the year by ABC, and two additional mid-season shows are in production. Management plans to build on Studios USA's success in first run programming, which includes its talk shows, plus Hercules and Xena for USA Network. We have raised our 4Q98 EBITDA estimate to $13 million from $10 million, and 1998 EBITDA to $52 million from our previous $44 million, growth of 49% yr./yr.
Home Shopping Continues On Track
Home Shopping Network core EBITDA came in at $45 million vs. $36 million, for 26% growth yr./yr., and slightly below our $46 million estimate. Growth was driven by higher volume of units shipped to 7.0 million from 6.4 million, and a lower return rate to 20.8% from 22.8%, supporting the company's strategy of shifting to more hardgoods from jewelry. HSN has experienced eight consecutive months of sales growth, which we expect to continue with the onset of the holiday season. For the first time we have broken out HSN/other, which had a loss of $4 million, to account for non-core businesses such as HSN international start-ups in Germany, Italy, Japan and Spain, and third party fulfillment. For 4Q98 we have raised our core EBITDA estimate slightly to $62 million vs. $43 million a year ago, growth of 42% yr./yr. The strong growth is a result of an easier year ago comp, as weakness in HSN's business began at the end of last year, due to a shift in preference to hardgoods, which the company failed to anticipate. An emphasis on cost cutting should also continue to drive margins. We expect 1998 core EBITDA of $180 million for 8% growth yr./yr. Ticketmaster Affected by International Start-up Losses Ticketmaster core EBITDA was $15 million, slightly lower than a year ago and matching our estimate.
The negative comp was due to start-up expenses for businesses in France, South America and Northern California, and a dearth of major outdoor concerts, which drive ticket sales. We expect the onset of the Millennium should generate an explosion in related concert tours and events. For the first time we have also broken out Ticketmaster/other which accounts for its non-core concession control business. For 4Q98 we expect core EBITDA of $15 million, yr./yr. growth of 16%, and for 1998, EBITDA of $60 million, growth of 7%.
Long-Term View Positive on Developing Assets
For developing assets, broadcasting EBITDA start up losses were $8 million, better than our estimate of $10 million. The company is moving forward with a rollout of four additional stations in 1999, which we believe could include Los Angeles, New York, and Chicago, following its Miami station, which was launched in June. Although results from Miami have been mixed, with some programming that management admits has not worked, we believe the strategy of developing a cable/broadcast hybrid network with USA Network/Sci-Fi channel should generate additional advertising revenue and affiliate
fees, as the combination should reach 90% of U.S. households. Internet Services losses, consisting primarily of First Auction, came in at $4 million, slightly greater than our estimate of $2 million. However, our long-term view of the business is positive, as First Auction is experiencing rapid membership growth, increasing 40% to 195,000 members from 140,000 members at the end of 2Q98, and from 170,000 members at the end of August. First Auction has a run rate of about $30 million which it should double next year. We expect the business to break even at about $75-$100 million in revenue, possibly in 2000. Units shipped should increase from 144,000 during the quarter, as First Auction can coordinate merchandise with that shown on HSN.
============= |
